(2) "appropriate officer" means an
officer of Sales Tax authorised by the Board by notification in the official
Gazette to perform certain functions under this Act;

(2A) 'arrears' includes the un-paid amounts of
tax, additional tax, (***) extra amount of tax, fines, penalties, fees or any
other sums, however described, as have been assessed, adjudged or demanded
under this Act;

(3)"associated persons" means any
two or more persons who are close relatives to each other or who are
interconnected with each other in the following way, namely:--

(i) if the
persons, being companies or undertakings, are under common management or
control or one is the subsidiary of the other;

(ii) if a person who is the owner or partner
or director of a company or undertaking, or who, directly or indirectly, holds
or controls twenty per cent shares in such company or undertaking, is also the
owner, partner or director of another company or undertaking, or, directly or
indirectly, holds or controls twenty per cent shares in that company or
undertaking;

Explanation.--
For the purpose of this clause, the expression “close relatives" mean the
family, parents, brothers, sisters and dependents of registered person;

(3A)“banking company” means a
banking company as defined in the Banking Companies Ordinance, 1962 (LVII of
1962) and includes any body corporate which transacts the business of banking
in Pakistan

(4)"Board" means the Central Board
of Revenue constituted under the Central Board of Revenue Act, 1924 (IV
of 1924);

(5)"Collector" means the Collector of Sales Tax
appointed under section 30;

(5A)(***)

(6)"Customs Act" means the
Customs Act 1969 (IV of 1969), and where appropriate all rules and
notifications made under that Act;

(6A)'Defaulter’ means a person and, in the case
of company or firm, every director, or partner of the company, or as the case
may be, of the firm, of which he is a director or partner or a proprietor and
includes guarantors or successors, who fail to pay the arrears;

(7)"Distributor" means a person
appointed by a manufacturer, importer or any other person for a specified area
to purchase goods from him for further supply and includes a person who in
addition to being a distributor is also engaged in supply of goods as a
wholesaler or a retailer;

(8)"Document" includes any
electronic data, computer programmes, computer tapes, computer disks,
micro-films or any other medium for the storage of such data;

(9)"Due date", in relation to the
furnishing of a return under section 26(***) and section 26AA means the 15th
day of the month following the end of the tax period, or such other date as the
Federal Government may, by notification in the official Gazette, specify;

(9a)(***)

(9aa)(***)

(10)"Establishment" means an
undertaking, firm or company, whether incorporated or not, an association of
persons or an individual;

(11)"Exempt supply,” means a supply which is exempt from tax
under section 13;

(12)"Goods" include every kind of
movable property other than actionable claims, money,

Stocks, shares and
securities;

(13)"Importer" means any person who lawfully imports any
goods into Pakistan;

(14)"Input tax", in relation to a registered person,
means the tax --

(a)Levied under this Act on the supply of goods received by that
person;

(b) Levied under this Act on
goods imported, entered and cleared under section

79 or section 104 of the
Customs Act, by that person;

(c)Levied under the Sales Tax Act,
1990 of Pakistan as adapted
in the State of Azad

Jammu and Kashmir, on the supply of goods
received by that person; and

(d)Chargeable as duties of excise under
section 3 of the Central Excises Act, 1944 (I of 1944), on such excisable goods
or services as are notified by the Federal Government under the third proviso
to sub-section (1) thereof and on which such duties are charged, levied and
paid as if it were a tax payable under section 3 of this Act;

(15)"Local Sales Tax Office" means
the office of Superintendent of Sales Tax, or such other office as the Board
may, by notification in the official Gazette, specify;

(16)"Manufacture" or
"produce" includes -

(a) Any process in which an article singly or in combination
with other articles,

Materials, components, is either converted into another distinct article or
product

Or is so changed, transformed or reshaped that it becomes capable of being put

To use differently or distinctly and includes any process incidental or
ancillary to

The completion of a manufactured product;

(b)Process of printing, publishing, lithography and engraving;
and

(c) Process and operations of assembling,
mixing, cutting, diluting, bottling, packaging, repacking or preparation of
goods in any other manner;

(17)"Manufacturer" or
"producer" means a person who engages, whether exclusively or not, in
the production or manufacture of goods whether or not the raw material of which
the goods are produced or manufactured are owned by him; and shall include --

(a)A person who by any process
or operation assembles, mixes, cuts, dilutes, bottles, packages, repackages or
prepares goods by any other manner;

(b) An assignee or trustee in bankruptcy,
liquidator, executor, or curator or any manufacturer or producer and any person
who disposes of his assets in any fiduciary capacity; and

(c) Any person, firm or company which owns,
holds, claims or uses any patent, proprietary, or other right to goods being
manufactured, whether in his or its name, or on his or its behalf, as the case
may be, whether or not such person, firm or company sells, distributes,
consigns or otherwise disposes of the goods:

Provided that
for the purpose of refund under this Act, only such person shall be treated as
manufacturer-cum-exporter who owns or has his own manufacturing facility to
manufacture or produce the goods exported or to be exported;

(18)"Officer of Sales Tax" means an
officer appointed under section 30;

(19)"Open market price" means the
consideration in money which that supply or a similar supply would generally
fetch in an open market;

(20)"Output tax" in relation to any
registered person means the tax charged under this Act in respect of a supply
of goods made by that person and shall include duties of excise chargeable
under section 3 of the Central Excises Act, 1944 (I of 1944) on such excisable
goods or services as are notified by the Federal Government under the third
proviso to sub-section (1) thereof and on which such duties are charged, levied
and paid as if it were a tax payable under section 3 of this Act;

(21)"Person" includes a company, an
association, a body of individuals whether incorporated or not, a public or
local authority, a Provincial Government or the Federal Government;

(22)"Prescribed" means prescribed by
rules made under this Act;

(23)"Registered office,” means the office
or other place of business specified by the registered person in the
application made by him for registration under this Act or through any
subsequent application to the Collector;

(24)"Registration number" means the
number allocated to the registered person for the purpose of this Act;

(25)
“Registered person” means a person who is registered or is liable to be
registered under this Act:

Provided that a
person liable to be registered but not registered under this Act (***) shall
not be entitled to any benefit available to a registered person under any of
the provisions of this Act or the rules made there under;

(26)* * *

(27)"Retail price", with reference
to the Third Schedule, means the price fixed by the manufacturer or the
importer, inclusive of all charges and taxes (other than sales tax) at which
any particular brand or variety of any article should be sold to the general
body of consumers or, if more than one such price is so fixed for the same
brand or variety, the highest of such price;

(28)"Retailer" means a person (***),
supplying goods to general public for the purpose of consumption:

Provided that
any person, who combines the business of import and retail or manufacture
or production with retail, shall notify and advertise wholesale prices and
retail prices separately, and declare the address of retail outlets, and his total
turnover per annum shall be taken into account for the purposes of registration
under section 14.

(28A) "Retail tax" means tax
levied under section 3AA;

(29) "Return" means any return required to be furnished
under Chapter-V of this Act;

(30) "Schedule" means a Schedule appended to this Act;

(31) "Similar supply", in relation to
the open market price of goods, means any other supply of goods which closely
or substantially resemble the characteristics, quantity, components and materials
of the aforementioned goods;

(31A)"Special audit" means an audit conducted under section
32A;

(32) "Special Judge" means the Special Judge appointed
under Section 185 of the Customs

Act;

(33) "supply" includes sale, lease
(excluding financial or operating lease) or other disposition of goods (***)
carried out for consideration and also includes --

(a)
putting to private, business or
non-business use of goods acquired, produced or

manufactured in the course of business;

(b)auction or disposal of goods to satisfy a debt owed by a
person; and

(c) possession of taxable goods held immediately before a
person ceases to be a

registered person:

(***)

Provided that the Federal Government, may by notification in the
official
Gazette, specify such other transactions which shall or shall not
constitute

supply;

(34)"tax" means the sales tax, (***)
retail tax or enlistment tax, and includes additional tax or any other sum
payable under any of the provisions of this Act or the rules made thereunder;

(35)"taxable activity" means any
activity which is carried on by any person, whether or not for a pecuniary
profit, and involves in whole or in part, the supply of goods or rendering of
services on which sales tax has been levied under the respective ordinance and
use of goods acquired for private purposes or for the manufacture of exempt
goods without making supply to any other person, whether for any consideration
or otherwise, and includes any activity carried on in the form of a business,
trade or manufacture;

(36)"tax fraction" means the amount
worked out in accordance with the following formula:--

a

______________

100 + a

('a'
is the rate of tax specified in section 3):

(37)"tax fraud" means knowingly,
dishonestly or fraudulently and without any lawful excuse (burden of proof of
which excuse shall be upon the accused) –

(i)doing of any act or causing to do any
act; or

(ii)
omitting to take any action or causing the omission to take any action,

in
contravention of duties or obligations imposed under this Act or rules or
instructions issued thereunder with the intention of understating the tax
liability or underpaying the tax liability for two consecutive tax periods or
overstating the entitlement to tax credit or tax refund to cause loss of tax;
including the making of taxable supplies without getting registration under
this Act,

(38)(***)

(39) "taxable goods" means all goods
other than those which have been exempted under section 13;

(40) "tax invoice" means a document required to be issued
under section 23;

(41)"taxable supply" means a supply
of taxable goods made (***) by an importer; manufacturer, wholesaler (including
dealer), distributor or retailer other than a supply of goods which is exempt
under section 13 and includes a supply of goods chargeable to tax at the rate
of zero per cent under section 4;

(42)* * *

(43)"tax period" means a period of
one month or such other period as the Federal Government may; by notification
in the official Gazette, specify;

(44)"time of supply" means a supply
(***) shall be deemed to have taken place at the earlier of the time of
delivery of goods or the time when any payment is received by the supplier in
respect of that supply:

Provided that
where any part payment is received –

(a)
for a supply in a tax period, it shall be accounted for in the
return for that tax period; and

(b)
in respect of an exempt supply, it shall be accounted for in the return for
that tax

period during which the exemption is withdrawn from
such supply:

Provided further that –

(a)
where any goods are supplied by a registered person to an associated

person and the goods are not to be removed, the
time of supply shall be

the time at which these goods are made available
to the recipient; and

(b) where the goods are supplied
under hire purchase agreement, the time

of supply shall be the time at which the agreement is entered into;

(45)(***)

(46)"value
of supply" means:--

(a)in respect of a taxable supply, the
consideration in money including all Federal and Provincial duties and taxes,
if any, which the supplier receives from the recipient for that supply but
excluding the amount of tax:

Provided that--

(i) in case the consideration for a supply
is in kind or is partly in kind and partly in money, the value of the supply
shall mean the open market price of the supply excluding the amount of tax;

(ii)
in case the supplier and recipient are associated persons
and the supply is made for no consideration or for a consideration which is
lower than the open market price, the value of supply shall mean the open
market price of the supply excluding the amount of tax; and

(iii)
in case a taxable supply is made to a consumer from general public
on installment basis on a price inclusive of mark up or surcharge rendering it
higher than open market price, the value of supply shall mean the open market
price of the supply excluding the amount of tax.

(b)
in case of trade discounts, the discounted price
excluding the amount of tax; provided the tax invoice shows the discounted
price and the related tax and the discount allowed is in conformity with the
normal business practices;

(c) in case where for any special nature of
transaction it is difficult to ascertain the value of a supply, the open market
price;

(d) in case of imported goods, the value
determined under section 25 or 25B of the Customs Act, including the amount of
customs-duties and central excise duty levied thereon;

(e) in case where there is sufficient
reason to believe that the value of a supply has not been correctly declared in
the invoice, the value determined by the Valuation Committee comprising
representatives of trade and the Sales Tax Department constituted by the
Collector; and

(f) in case the goods other than taxable
goods are supplied to a registered person for processing, the value of supply
of such processed goods shall mean the price excluding the amount of sales tax
which such goods will fetch on sale in the market:

(g) in case of a taxable supply, with
reference to retail tax, the price of taxable goods excluding the amount of
retail tax, which a supplier will charge at the time of making taxable supply
by him, or such other price as the Board may, by a notification in the official
Gazette, specify:

Provided that,
where the Central Board of Revenue deems it necessary, it may, by notification
in the official Gazette, fix the value of any taxable supplies or class of
supplies and for that purpose fix different values for different classes or
description of same type of supplies:

Provided
further that where the value at which the supply is made is higher than the
value fixed by the Central Board of Revenue, the value of goods shall, unless
otherwise directed by the Board, be value at which the supply is made;

(47)"wholesaler” includes a dealer and
means any person who carries on, whether regularly or otherwise, the business
of buying and selling goods by wholesale or of supplying or distributing goods,
directly or indirectly, by wholesale for cash or deferred payment or for
commission or other valuable consideration or stores such goods belonging to
others as an agent for the purpose of sale; and includes a person supplying
taxable goods to a person whose income is not liable to tax under the Income
Tax Ordinance, 2001 (XLIX of 2001) but has deducted income tax at source under
section 153 of the said Ordinance, and a person who in addition to making
retail supplies is engaged in wholesale business; and

(48)"zero - rated supply" means a
taxable supply which is charged to tax at the rate of zero per cent under
section 4.

(1)Subject to the provisions of this Act,
there shall be charged, levied and paid a tax known as sales tax at the rate of
fifteen per cent of the value of--

(a)
taxable supplies made (***) by a registered person in the course or furtherance
of

any taxable activity carried on by him; and

(b)
goods imported into Pakistan.

(1A)(***)

(2)Notwithstanding the provisions of
sub-section (1):--

(a) taxable supplies specified in the Third
Schedule shall be charged to tax at the rate of fifteen per cent of the retail
price which along with the amount of sales tax shall be legibly, prominently
and indelibly printed or embossed by the manufacturer on each article, packet,
container, package, cover or label, as the case may be; and

(b) the Federal Government may, subject to
such conditions and restrictions as it may impose, by notification in the
official Gazette, declare that in respect of any goods or class of goods
imported into or produced in Pakistan or any taxable supplies made by a
registered person or a class of registered persons, the tax shall be charged,
collected and paid in such manner and at such higher or lower rate or rates as
may be specified in the said notification.

(3)The liability to pay the tax shall be,--

(a)
in the case of supply of goods, of
the person making the supply, and

(b) in the case of
goods imported into Pakistan,
of the person importing the goods.

(3A)Notwithstanding anything contained in
clause (a) sub-section (3), the Federal Government may, by a notification in
the official Gazette, specify the goods in respect of which the liability to
pay tax shall be of the person receiving the supply.

(4)The Federal Government may, for a period
not beyond the 30th June, 2003,
in addition to or in lieu of levying and collecting the
tax under sub-section (1), levy and collect such withholding tax not exceeding
five per cent of the value on any supply of textile goods to be payable by any
registered person or class of registered persons, supplying such goods or class
of goods, in such mode, manner and at time, and subject to such conditions and
limitations as it may specify by a notification in the official Gazette.

(5)The Federal Government may, in addition
to the tax levied under sub-section (1) (***), sub-section (2) and sub-section
(4), levy and collect such extra amount of tax not exceeding fifteen per cent
of the value of such goods or class of goods and on such persons or class of
persons, in such mode, manner and at time, and subject to such conditions and
limitations as it may, by rules, prescribe.

(6)The Federal Government or the Central
Board of Revenue may, in lieu of the tax under sub-section (1), by notification
in the official Gazette, levy and collect such amount of tax as it may deem fit
on any supplies or class of supplies or on any goods or class of goods and may
also specify the mode, manner or time of payment of such amount of tax.

(1)Subject to the provisions of this
section, and such conditions and procedures regarding the mode, manner and time
of payment, and from such date as may be specified by the Federal Government,
there shall be charged, levied and paid retail tax at the rate specified in
section 3, by a retailer who is making taxable supplies in the course or
furtherance of any taxable activity carried by him.

(2)Subject to such modification as the
Board may specify, all provisions of this Act shall apply to the charge, levy,
deduction of input tax, payment, collection and enforcement of the retail tax,
as if it were sales tax under section 3.

(3)The application for registration as tax
payer of retail tax shall be made to the Collector in such form and manner as
may be specified by the Board.

(4)Notwithstanding the provisions of
sub-section (1), a retailer not liable to pay tax, shall, after voluntary
registration as prescribed under section 14, opt for paying sales tax under the
section.

(1)Any person who has collected or collects
any tax or charge, whether under misapprehension of any provision of this Act
or otherwise, which was not payable as tax or charge or which is in excess of
the tax or charge actually payable and the incidence of which has been passed
on to the consumer, shall pay the amount of tax or charge so collected to the
Federal Government.

(2)Any amount payable to the Federal
Government under sub-section (1) shall be deemed to be an arrear of tax or
charge payable under this Act and shall be recoverable accordingly and no claim
for refund in respect of such amount shall be admissible.

(3)The burden of proof that the incidence
of tax or charge referred to in sub-section (1) has been or has not been passed
to the consumer shall be on the person collecting the tax or charge.

(1)The tax in respect of goods imported
into Pakistan shall be charged and paid in the same manner and at the same time
as if it were a duty of customs payable under the Customs Act, 1969 and the
provisions of the said Act including section 31A thereof, shall, so far as they
relate to collection, payment and enforcement of tax under this Act on such
goods where no specific provision exists in this Act, apply.

(1A)Notwithstanding anything contained in any
other law for the time being in force, including but not limited to the
Protection of Economic Reforms Act, 1992 (XII of 1992), and notwithstanding any
decision or judgment of any forum, authority or court whether passed, before or
after the promulgation of the Finance Act, 1998 (III of 1998), the provisions
of section 31-A of the Customs Act, 1969 (IV of 1969), referred to in
sub-section (1) shall be incorporated in and shall be deemed to have always
been so incorporated in this Act and no person shall be entitled to any
exemption from or adjustment of or refund of tax on account of the absence of
such a provision in this Act, or in consequence of any decision or judgment of
any forum, authority or court passed on that ground or on the basis of the
doctrine of promissory estoppel or on account of any promise or commitment made
or understanding given whether in writing or otherwise, by any government
department or authority.

(2)The tax in respect of taxable supplies
made (***) during a tax period shall be paid by the registered person at the
time of filing the return in respect of that period under Chapter-V:

Provided that
the Board may, by a notification in the Official Gazette, direct that the tax
in respect of all or such classes of supplies (other than zero-rated supplies)
of all or such taxable goods, as may be specified in the aforesaid
notification, shall be charged, collected and paid in any other way, mode,
manner or at time as may be specified therein.

(3)The tax due on taxable supplies (***)
shall be paid by any of the following modes, namely:--

(i)through deposit in a bank designated by
the Board; and

(ii)through such other mode and manner as
may be specified by the Board.

(1)For the purpose of determining his tax
liability in respect of taxable supplies made during a tax period, a registered
person shall, subject to the provisions of section 73, be entitled to deduct
input tax paid or payable during the tax period for the purpose of taxable
supplies made, or to be made, by him from the output tax (***) that is due from
him in respect of that tax period and to make such other adjustments as are
specified in Section 9:

Provided that
the taxpayer may adjust input tax paid on the purchases in the immediate three
preceding tax periods from the output tax subject to the condition that the
taxpayer specifies the reasons for such delayed input tax adjustment in the
revised sales tax return for such period or in the return for the immediately
succeeding tax period.

(i)
in case of a claim for input tax in respect of a
taxable supply made (***), he holds a tax invoice in his name and bearing his
registration number in respect of such supply for which a return is furnished;

(ii)
in case of goods imported into Pakistan, he holds bill of
entry or goods declaration in his name and showing his sales tax registration
number, duly cleared by the customs under section 79 or section 104 of
the Customs Act, 1969 (IV of 1969);

(iii) in case of goods purchased in auction,
he holds a treasury challan , in his name and bearing his registration number,
showing payment of sales tax;

(3)Notwithstanding anything in sub-sections
(1) and (2), the Federal Government may, by a special order, subject to such
conditions, limitations or restrictions as may be specified therein allow a
registered person to deduct input tax paid by him from the output tax
determined or to be determined as due from him under this Act.

(1)
Notwithstanding anything contained in this Act or the rules made thereunder,
the Federal Government may specify, by notification in the official Gazette,
that sales tax chargeable on the supply of goods of such description or class
shall, with such limitations or restrictions as may be prescribed, be levied
and collected on the difference between the value of supply for which the goods
are acquired and the value of supply for which the goods, either in the same
state or on further manufacture, are supplied.

(2)
Notwithstanding anything contained in this Act or the rules made thereunder,
the Federal Government may, by notification in the official Gazette, and
subject to the conditions, limitations, restrictions and procedure mentioned
therein, specify the minimum value addition required to be declared by certain
persons or categories of persons, for supply of goods of such description, or
class as may be prescribed, and to waive the requirement of audit or scrutiny
of records if such minimum value addition is declared.

(1)Notwithstanding anything contained in
this Act, a registered person shall not be entitled to reclaim or deduct input
tax paid on --

(a) the goods used or to be used for any
purpose other than for the manufacture or production

of taxable goods or for taxable supplies made or to be made by him;

(b)any other goods which the Federal
Government may, by a notification in the official

Gazette, specify; (***)

(c)(***) the goods under sub-section (5) of
section 3:

(d)
fake invoices; and

(e)purchases made by such
registered person, in case he fails to furnish the

information required by the Board through a notification issued under
sub-section

(5) of section 26.

(2)If a registered person deals in
taxable and non-taxable supplies, he can reclaim only such

proportion of the input tax as is attributable to taxable supplies in such
manner as may be

specified by the Board.

(3)No person other than a registered
person shall make any deduction or reclaim input tax in respect of taxable
supplies made or to be made by him.

(4)(***)

(5) Notwithstanding
anything contained in any other law for the time being in force or any decision
of any Court, for the purposes of this section, no input tax credit shall
be allowed to the persons who paid fixed tax under any provisions of this Act
as it existed at any time prior to the first day of December, 1998.

(6) Notwithstanding
anything contained in any other law for the time being in force or any
provision of this Act, the Federal Government may, by notification in the
official Gazette, specify any goods or class of goods which a registered (***)
person cannot supply to any person who is not registered (***) under this Act.

Where a
registered person has issued a tax invoice in respect of a supply made by him
and as a result of cancellation of supply or return of goods or a change in the
nature of supply or change in the value of the supply or some such event the
amount shown in the tax invoice or the return needs to be modified, the
registered person may, subject to such conditions and limitations as the Board
may impose, issue a debit or credit note and make corresponding adjustment
against output tax in the return.

(1)Subject to the provisions of sub-section
(2), if in relation to a tax period, the total deduction of input tax and other
adjustments as specified in section 9 exceed the output tax, the excess amount
shall be carried forward by the registered manufacturer, importer, wholesaler
or retailer to the next tax period and shall be treated as input tax for that
tax period:

Provided that any excess amount of tax carried
forward, from the previous tax

period may be refunded to the registered person subject to such conditions,

restrictions and limitations as the Board, may by notification in the official

Gazette, specify

Provided
further that the refund of tax charged on the acquisition of plant and
machinery shall also be admissible to the registered person who, at the time of
taking delivery of taxable plant and machinery, its components and spare parts
is not making taxable supplies, subject to the condition that he shall, within
the period specified by the Board, by notification in the official Gazette,
commence taxable supplies and complies with such other conditions as are
specified therein.

(2) Notwithstanding anything contained in
sub-section (1), the input tax incurred in connection with a zero-rated supply
shall be refunded not later than thirty days of filing of return in such manner
and subject to such conditions as the Board may, by notification in the
official Gazette, specify.

(3) If a registered person is liable to pay
any tax, additional tax or penalty payable under any law administered by the
Board, the refund of input tax shall be made after adjustment of unpaid
outstanding amount of tax or, as the case may, additional tax and penalty.

(4)Where there is reason to believe that a
person has claimed input tax credit or refund which was not admissible to him,
the provisions regarding time limit shall not apply till the investigation,
including the verification of the deposit of tax claimed as refund, is
completed and the claim is either accepted or rejected.

(1)Where a person who is required to file a
tax return fails to file the return for a tax period by the due date or pays an
amount which, for some miscalculation is less than the amount of tax actually
payable, an officer of Sales Tax shall, after a notice to show cause to such
person, make an order for assessment of tax, including imposition of penalty
and additional tax in accordance with section 33 and 34:

Provided that
where a person required to file a tax return files the return after the due
date and pays the amount of tax payable in accordance with the tax return along
with additional tax and penalty, the notice to show cause and the order of
assessment shall abate.

(2) Where a person has not paid the tax due
on supplies made by him or has made short payment or has claimed input tax
credit or refund which is not admissible under this Act for reasons other than
those specified in sub-section (1), an officer of Sales Tax shall make an
assessment of sales tax actually payable by that person or determine the amount
of tax credit or tax refund which he has unlawfully claimed and shall impose a
penalty and charge additional tax in accordance with section 33 and 34.

(3) * * *

(4)No order under this section shall be
made by an officer of Sales Tax unless a notice to show cause is given to the
person in default specifying the grounds on which it is intended to proceed
against him and the officer of Sales Tax shall take into consideration the
representation made by such person and provide him with an opportunity of being
heard:

Provided that
order under this section shall be made within ninety days of issuance of show
cause notice or within such extended period as the Collector or, as the case
may be, Collector (Adjudication) may, for reasons to be recorded in writing,
fix provided that such extended period shall in no case exceed ninety days.

(5)Notwithstanding anything in sub-section
(1), where a registered person fails to file a return, an officer of Sales Tax
Department, not below the rank of Assistant Collector, shall subject to such
conditions as specified by the Central Board of Revenue, determine the minimum
tax liability of the registered person.

Notwithstanding
any of the provisions of this Act, where a registered or enrolled person pays
the amount of tax less than the due tax as indicated in his return, the
short-paid amount of tax shall be recovered without giving a show cause notice
to such person provided that no additional tax or penalty shall be charged
unless a show cause notice is given to such person.

(1) Notwithstanding the provisions of section
3, supply of goods or import of goods specified in the Sixth
Schedule shall, subject to such conditions as may be specified by the
Federal Government, be exempt from tax under this Act.

(2) Notwithstanding the provisions of
sub-section (1) --

(a)the Federal Government may, by
notification in the official Gazette, exempt any taxable supplies made (***) or
any goods or class of goods, from the whole or any part of the tax chargeable
under this Act, subject to the conditions and limitations specified therein;
and

(b)the Board may, by special order in each
case stating the reasons, exempt any import or supply of goods of such description
or class, as may be specified from the payment of the whole or any part of the
tax chargeable under this Act.

(3)The exemption from tax chargeable under
sub-section (2) may be allowed from any previous date specified in the
notification issued under clause (a) or, as the case may be, order made under
clause (b) of that sub-section.

(4)Where a person does not desire to avail
any tax exemption, he may, after voluntary registration, opt to pay sales tax
at the rate applicable to such supplies under the provisions of section
3 subject to condition that he shall not thereafter be de-registered till
the expiry of two years from the date of such registration.

(1) The Board or any officer,
authorized in this behalf, may subject to the rules, de-register a registered
person or such class of registered persons not required to be registered under
this Act.

(2) Notwithstanding anything contained in this Act, in cases where the
Collector is satisfied that a registered person is found to have issued fake
invoices, evaded tax or has committed tax fraud, he may blacklist such person
or suspend his registration in accordance with such procedure as the Board may,
by notification in the official Gazette, prescribe.

22.
Records- (1) A registered person making taxable supplies
shall maintain and keep at his business premises or registered office in
English or Urdu language the following records of goods purchased and supplies
(including zero-rated and exempt supplies) made by him or by his agent acting
on his behalf in such form and manner as would permit ready ascertainment of
his tax liability during a tax period -

(a)
records of supplies made shall indicate the description, quantity and value of goods,
name and address of the person to whom supplies were made and the amount of the
tax charged;

(b)
records of goods purchased shall show the description, quantity and value of
goods, name, address and registration number of the supplier and the amount of
the tax on purchases;

Provided that the persons paying turnover tax or retail tax shall keep such
record as may be specified by the Board.

(2)
The Board may, by notification in the official Gazette, specify for any class
of taxable persons or any other person registered under this Act to keep such
other records for the purposes of this Act.

(2A) The
Board may, by notification in the Official Gazette, specify for any class of
taxable persons registered under this Act to use such electronic fiscal cash
registers as are approved by the Board in the manner as may be prescribed.

(3)
The Board may, by notification in the official gazette, prescribe the procedure
or software for electronically maintenance of records, filing of sales
tax returns or refunds and for any other matter or approve any software for
electronic maintenance of records and filing of returns or refunds by a person
or class of such persons.

23.
Tax Invoices.-

(1)
A registered person making a taxable supply shall issue a serially numbered tax
invoice at the time of supply of goods containing the following particulars,
namely:-

(a)
name, address and registration number of the supplier;

(b)
name, address and registration number of the recipient;

(c)
date of issue of invoice;

(d)
description and quantity of goods;

(e)
value exclusive of tax;

(f)
amount of sales tax; and

(ff)
(***)

(g)
value inclusive of tax:

Provided that
the Board may, by notification in the official Gazette, specify such modified
invoices for different persons or classes of persons:

Provided
further that not more than one tax invoice shall be issued for a taxable
supply.

(2)
No person other than a registered person or a person paying (***) retail tax
shall issue an invoice under this section.

24.
Retention of record and documents for five years.-

A person who is
required to maintain any record or documents under this Act, shall retain the
record and documents for a period of five years after the end of the tax period
to which such record or documents relate.

25.
Access to record, documents, etc.-

(1)
A person who is required to maintain any record or documents under this Act or
any other law shall, as and when required by an officer of Sales Tax, produce
record or documents which are in his possession or control or in the possession
or control of his agent; and where such record or documents have been kept on
electronic data, he shall allow access to such officer of Sales Tax and use of
any machine on which such data is kept.

(2)
The officer of Sales Tax, on the basis of the record, obtained under
sub-section (1), may, once in a year, conduct audit:

Provided that in case the Collector has
information or sufficient evidence showing that such registered person is
involved in tax fraud or evasion of tax, he may authorize an officer of sales
tax, not below the rank of Assistant Collector, to conduct an inquiry or
investigation under section 38.

(3)
The Assistant Collector (Audit), shall issue audit observation pointing out the
contraventions of the Act or rules, as the case may be, and the amount of tax
evaded therein, on the basis of scrutiny of such records, as prescribed under
the Act or rules or in any other manner by the Board. The registered person
may, within a period of fifteen days of the receipt of audit observation,
submit his point of view in writing.

(4)
If, within the period prescribed in sub-section (3), no reply is received or
the reply furnished by the registered person is found unsatisfactory, the
Assistant Collector shall issue an audit report specifying the amount of tax or
charge that has not been levied or has been short levied or has been
erroneously refunded or any other violation of any provision of Act or rules
made thereunder.

(5)
Notwithstanding the penalties prescribed in section 33, if a registered person
wishes to deposit the amount of tax short paid or amount of tax evaded along
with additional tax voluntarily, whenever it comes to his notice, before
receipt of notice of audit, no penalty shall be recovered from him:

Provided if a registered person wishes to deposit the amount of tax short paid
or amount of tax evaded along with additional tax during the audit, or at any
time before issuance of show cause notice in lieu of the audit report, he may
deposit the evaded amount of tax, additional tax under section 34, and twenty
five per cent of the penalty payable under section 33:

Provided further that if a registered person wishes to deposit the amount of
tax short paid or amount of tax evaded along with additional tax after issuance
of show cause notice, he shall deposit the evaded amount of tax, additional tax
under section 34, and full amount of the penalty payable under section 33 and
thereafter, the show cause notice, shall stand abated.

25A. Drawing of
samples.-

Where an
authorized officer of sales tax considers it necessary to take a sample of any
goods or raw materials, for the purpose of determining their liability to sales
tax or for the purpose of establishing their value or for any other reason, he
may remove a minimum quantity of goods or raw materials sufficient to enable a
proper examination or analysis to be made. At the time of taking the sample the
person in possession of the goods shall be informed and given the opportunity
to sign the representative samples, so drawn, and take a corresponding sample for
his record. Any sample taken under this section shall be taken against a proper
receipt a copy each of which shall be kept in the record by the registered
person and the collectorate.

26.
Monthly Return.-

(1)
Every registered person shall furnish not later than the due date a true and
correct return in the prescribed form to a designated bank specified by the
Board, indicating the purchases and the supplies made during a tax period, the
tax due and paid and such other information, as may be prescribed.

(2)
If there is a change in the rate of tax during a tax period, a separate return
in respect of each portion of tax period showing the application of different
rates of tax shall be furnished.

(3)
A registered person may file a revised return to correct any omission or wrong
declaration made in a return filed under sub-section (1) or sub-section (2).

(4)
Notwithstanding the penalties prescribed in section 33, if a registered person
wishes to file revised return voluntarily along with deposit of the amount of
tax short paid or amount of tax evaded along with additional tax, whenever it
comes to his notice, before receipt of notice of audit, no penalty shall be
recovered from him:

Provided that in case the registered person wishes to deposit the amount of tax
as pointed out by the officer of sales tax during the audit, or at any time
before issuance of the show cause notice in lieu of the audit report, he may
deposit the evaded amount of tax, additional tax under section 34, and
twenty-five per cent of the penalty payable under section 33 along with the
revised return:

Provided further that in case the registered person wishes to deposit the
amount after issuance of show cause notice, he shall deposit the evaded amount
of sales tax (***), additional tax under section 34, and full amount of the
leviable penalty under section 33 along with the revised return and thereafter,
the show cause notice, shall stand abated.

(5)The Board may, by notification in the
official Gazette, require any person or class of persons, for any goods of such
description or class, to furnish such summary or details or particulars
pertaining to the imports, purchases and supplies during any tax period or
periods, in such format as may be specified.

26AA. Retail
Tax Return.-

(1)
Every registered retailer making taxable supplies shall furnish not later than
due date a true and correct return in the prescribed form to the designated
branch of the bank specified by the Board.

(2)
If there is a change in the rate of tax during a tax period, a separate return
in respect of each portion of tax period, showing the application of different
rates of tax, shall be furnished.

(3) A
registered retailer may file a revised return to correct any omission or wrong
declaration made in a return filed under sub-section (1) or sub-section (2).

(4) Notwithstanding
the penalties prescribed in section 33, if a registered retailer wishes to file
a revised return voluntarily along with deposit of the amount of tax short paid
or amount of tax evaded along with additional tax, whenever it comes to his
notice, before receipt of notice of audit, no penalty shall be recovered from
him:

Provided that in case
the registered retailer wishes to deposit the amount of tax as pointed out by
the officer of Sales Tax during the audit, or at any time before issuance of
the show cause notice in lieu of the audit report, he may deposit the evaded
amount of tax, additional tax under section 34, and twenty-five per cent of the
penalty payable under section 33 along with the revised return:

Provided further that in case the registered retailer wishes to deposit the
amount after issuance of show cause notice, he shall deposit the evaded amount
of sales tax (***), additional tax under section 34, and full amount of the
leviable penalty under section 33 along with the revised return and thereafter,
the show cause notice, shall stand abated.

27.
Special Returns.-

In addition to
the return specified under section 26---

(a)
a person registered (***) under this Act shall furnish special return within
such date and in such form indicating information such as quantity manufactured
or produced, purchases made, goods supplied or payment of arrears made, etc,
for such period as the Board may, by a notification in official gazette,
specify; and

(b)
the collector may require any person whether, registered or not, to furnish a
return (whether on his own behalf or as an agent or trustee) in a prescribed
form and such person shall furnish the return not later than the date specified
in this regard.

28.
Final Return.-

If a person
applies for de-registration in terms of section 21, he shall before such
de-registration, furnish a final return to the Collector in the specified form
in such manner and at such time as directed by the Collector].

29.
Return deemed to have been made.-

A return
purporting to be made on behalf of a person by his duly appointed
representative shall, for all purposes, be deemed to have been made by such
person or under his authority unless proved to the contrary.

30. Appointment
of officer.-- For the purposes of this Act, the board may, by notification in
the official Gazette, appoint in relation to any area, any case or class of
cases specified in the notification, any person to be-

(a) a Collector
of Sales Tax;

(b) a Collector
of Sales Tax (Adjudication);

(c) an
Additional Collector of Sales Tax;

(d) a Deputy
Collector of Sales Tax;

(e) an
Assistant Collector of Sales Tax;

(f) a
Superintendent of Sales Tax;

(g) an officer
of sales tax with any other designation.

31. Powers.--
An officer of sales tax appointed under section 30 shall exercise such powers
and discharge such duties as are conferred or imposed upon him under this Act;
and he shall also be competent to exercise all powers and discharge all duties
conferred or imposed upon any officer subordinate to him:

Provided that,
notwithstanding anything contained in this Act or the rules, the Board may, by
general or special order, impose such limitations or conditions on the exercise
of such powers and discharge of such duties as it deems fit.

32. Delegation
of powers.-- (1) The Board may, by notification in the official Gazette and subject
to such limitations or conditions as may be specified therein, empower by name
or designation -

(a) any
Additional Collector of Sales Tax or Deputy Collector of Sales Tax to exercise
any of the powers of a Collector of Sales Tax under this Act;

(b) any Deputy
Collector of Sales Tax or Assistant Collector of Sales Tax to exercise any of
the powers of an Additional Collector of Sales Tax under this Act;

(c) any
Assistant Collector of Sales Tax to exercise any of the powers of a Deputy
Collector of Sales Tax under this Act; and

(d) any other
officer of Sales Tax to exercise any of the powers of an Assistant Collector of
Sales Tax under this Act

(2) Unless the
Board in any case otherwise directs, the Collector may authorize an officer
subordinate to him to exercise within any specified area, any of the powers of
the Collector or of any other officer of Sales Tax under this Act.

(3) The officer
to whom any powers are delegated under this section shall not further delegate
such powers.

32A. Special
Audit by Chartered Accountants or Cost Accountants -- (1) The Board may, by
notification in the official Gazette, appoint a Chartered Accountant as defined
under Chartered Accountants Ordinance, 1961 (X of 1961) or a firm of Chartered
Accountants or a Cost and Management Accountant within the meaning of the Cost
and Management Accountants Act, 1966 (XIV of 1966) or a firm of Cost and
Management Accountants, for conducting special audit of records of registered
person.

(2)
Notwithstanding that records of a registered person have been audited by an
officer appointed under section 30, the Board or a collector may direct an
auditor appointed under sub-section (1) to audit the records of any registered
person.

(3) An auditor
appointed under sub-section (1), shall have the powers of an officer of sales
tax under sections 25, 37 and 38.

32AA.
Audit of Retailer.--

(1) An officer of Sales Tax not below the rank of auditor or
deputy superintendent may, subject to such

conditions and limitations as may be imposed by the Board or Collector, carry
out audit of any retailer

assigned to him by Assistant Collector and such audit may include surveillance,
video filming,

gathering of information through pretending or actual customer of the taxable
activities of such

retailer.

(2) A retailer who pays (***) retail tax under section 3AA
may in lieu of audit of his business by an

officer of Sales Tax, opt for audit by a Chartered Accountant or a Cost
and Management Accountant

authorized by Central Board of Revenue in terms of section 32A provided
he pays half of the fee

payable to such Chartered Accountant or, as the case may be, Cost and
Management Accountant.

33.
General Penalties.--

(1) Any person who fails to furnish a return within the due
date shall pay a penalty of five thousand

rupees:

Provided that in case a registered person files a return within fifteen days of
the due date, he shall

pay a penalty of one hundred rupees for each day of default.

(2) Any person who --

(a) fails to issue an invoice when required under this Act;

(b) unauthorizedly issues an invoice in which an amount of
tax is specified;

(c) fails to notify the changes of material nature in the
particulars of registration or taxable activity;

(cc) fails to deposit the amount of tax due or any part thereof in
the time or manner laid down under

this Act or rules or orders made thereunder;

(d) repeats erroneous calculations in the return during a
year whereby amount of tax less than the

actual tax due is paid,

shall pay a penalty of five thousand rupees or three per cent
of the amount of the tax involved,

whichever is higher:

Provided that in case the amount of sales tax payable in the return does not
exceed five

thousand rupees, he shall pay a penalty of one thousand rupees:

Provided further that no penalty shall be imposed when any miscalculation is
made for the

first time during a year.

(3) Any person who --

(a) is required to apply for registration (***) under this
Act fails to make an application for registration

before making taxable supplies;

(b)
fails to maintain records required under this Act or the rules made thereunder;
or

(c) fails to furnish
the information required by the Board through a notification issued undersub-section

(5) of section 26,

shall
pay penalty of ten thousand rupees or five percent of the amount of tax
involved, whichever is

personification, gives any false information or issues or uses a document which
is forged or false;

(d) denies or obstructs the access of an authorised officer
to business premises, registered office or to

any other place where records are kept;

(e) otherwise obstructs the authorised officer in the performance
of his official duties; or

(f) commits, causes to commit or attempts to commit the tax
fraud,

shall pay a penalty of twenty five thousand rupees or one hundred percent of
the amount of tax involved,

whichever is higher.

(5) Any person who causes or attempt to commit or abets the
commission of any of the acts specified in

the preceding sub-sections shall pay the penalties specified therein.

(6) Where any of the acts specified in sub-sections (3) and
(4) of this section is committed by a corporate

body or an association of persons, whether incorporated or not, the Chief
Executive of that body shall

pay a penalty of twenty five thousand rupees, in addition to other Penalties
adjudged against him under

any other provisions of this Act.

(6A) A registered (***) person or retailer who without any
reasonable cause fails to comply with the

provisions of section 25, shall pay, —

(a) for failing to produce the record on receipt of first
notice, a penalty of two thousand five hundred

rupees;

(b) for
failing to produce the record on receipt of second notice, a penalty of ten
thousand rupees;

and

(c)
for failing to produce the record on receipt of third notice, a penalty of
fifty thousand rupees.

(7) Any person who contravenes any of the provision of this
Act for which no penalty has, specifically,

been provided in this Act, shall pay a penalty of two thousand and five hundred
rupees or three percent

of the amount of tax involved, whichever it higher.

34. Additional
Tax. – (1) Notwithstanding the provisions of section 11, if a registered person
or enrolled person does not pay the tax due or any part thereof in time or in
the manner specified under this Act, rules or notification issued thereunder or
claims a tax credit, refund or makes an adjustment, which is not admissible to
him, or incorrectly applies the rate of zero per cent to supplies made by him,
he shall, in addition to the tax due, and the prescribed penalties, pay
additional tax at the rate of one per cent of the tax due per month or any part
thereof.

(2) For the purpose of calculation of additional tax:-

(a) in the case of inadmissible input tax credit or refund, the period of
default shall be reckoned from the date of adjustment of such credit or, as the
case be, refund is received; and

(b) in the case of non-payment of tax or part thereof, the period of default
shall be reckoned from the 16th day of a month (following the due date of the
tax period to which the default relates) to the day preceding the date on which
the tax due is actually paid.

Explanation –
For the purpose of this section tax due does not include the amount of penalty.

34A. Exemption
from penalty and additional tax.-- The Federal Government may, by a
notification in the official Gazette, or the Central Board of Revenue by a
special order published in Gazette for reasons to be recorded in writing,
exempt any person or class of persons from payment of the whole or part of the
penalty and additional tax imposed under sections 33 and 34 subject to such
conditions and limitations as may be specified in such notification or, as the
case may be, special order.

36. Recovery of
tax not levied or short-levied or erroneously refunded.-- (1) Where by reason
of some collusion or a deliberate act any tax or charge has not been levied or
made or has been short-levied or has been erroneously refunded, the person
liable to pay any amount of tax or charge or the amount of refund erroneously
made shall be served with a notice, within five years of the relevant date,
requiring him to show cause for payment of the amount specified in the notice.

(2) Where, by reason of any inadvertence, error or misconstruction, any tax or
charge has not been levied or made or has been short-levied or has been
erroneously refunded, the person liable to pay the amount of tax or charge or
the amount of refund erroneously made shall be served with a notice within
three years of the relevant date, requiring him to show cause for payment of
the amount specified in the notice:

Provided that, where a tax or charge has not been levied under this
sub-section, the amount of tax shall be recovered as tax fraction of the value
of supply.

(3) The officer of Sales Tax empowered in this behalf shall, after considering the
objections of the person served with a notice to show cause under sub-section
(1) or sub-section (2), determine the amount of tax or charge payable by him
and such person shall pay the amount so determined.

Provided that order under this section shall be made within ninety days of
issuance of show cause notice or within such extended period as the Collector
or, as the case may be, Collector (Adjudication) may, for reasons to be
recorded in writing, fix, provided that such extended period shall in no case
exceed ninety days:

Provided further that where a registered (***) person is served with
audit observation, the period of,—

(i) five
years prescribed in sub-section (1); and

(ii) three
years prescribed in sub-section (2),

for the issuance of show cause notice shall be treated as extended from
the date of serving of audit observation (s) to the date of issuance of show
cause notice.

(4) For the purpose of this section, the expression "relevant date"
means--

(a) the time of payment of tax or charge as provided under section 6; and

(b) in a case where tax or charge has been erroneously refunded, the date of
its refund.

37. Power to
summon persons to give evidence and produce documents in inquiries under the
Act.-- (1) Any officer of sales tax shall have powers to summon any person
whose attendance he considers necessary either to tender evidence or to produce
documents or any other thing in any inquiry which such officer is making for
any of the purposes of this Act.

(2) Any person summoned under sub-section (1) shall be bound to attend either
in person or by an authorised agent, as the officer of sales tax may direct;

Provided that a person who is exempt from personal appearance in a court under
section 132 and 133 of the Code of Civil Procedure (V of 1908), shall not be
required to appear in person.

(3) Any inquiry before an officer of sales tax shall be deemed to be a judicial
proceeding within the meaning of section 193 and 228 of the Pakistan Penal Code
(Act XLV of 1860).

37A. Power to
arrest and prosecute.-- (1) An officer of Sales Tax, not below the rank of an
Assistant Collector of Sales Tax or any other officer of equal rank authorised
by the Central Board of Revenue in this behalf, who on the basis of material
evidence has reason to believe that any person has committed a tax fraud in
respect of a supply or supplies made by him, may cause arrest of such person.

(2) All arrests made under this Act shall be carried out in accordance with the
relevant provisions of the Code of Criminal Procedure, 1898 (Act V of 1898).

(3) Where any person commits a tax fraud, he shall be punishable with
imprisonment for a term which may extend to five years, or with fine which may
extend to any amount equal to the loss of tax involved, or with both.

(4) Notwithstanding anything contained in sub-section (1) to subsection (3) or
any other provision of this Act, where any person has committed a tax fraud,
the Collector may, either before or after the institution of any proceedings
for recovery of tax, compound the offence if such person pays the amount of tax
due alongwith such additional tax and penalty as is determined under the
provisions of this Act.

(5) Where the person suspected of tax fraud is a company, every director or
officer of that company whom the authorised officer has reason to believe is
personally responsible for actions of the company contributing the tax fraud
shall be liable to arrest; provided that any arrest under this sub-section
shall not absolve the company from the liabilities of payment of tax,
additional tax and penalty imposed under this Act].

37B. Procedure
to be followed on arrest of a person.-- (1) When a Sales Tax Officer authorised
in this behalf arrests a person under Section 37A, he shall immediately
intimate the fact of the arrest of that person to the Special Judge who may
direct such Officer to produce that person at such time and place and on such
date as the Special Judge considers expedient and such Officer shall act
accordingly.

(2) Notwithstanding anything contained in the sub-section (1), any person
arrested under this Act shall be produced before the Special Judge or, if there
is no Special Judge within a reasonable distance, to the nearest Judicial
Magistrate within twenty-four hours of such arrest, excluding the time
necessary for the journey from the place of arrest to the Court of the Special
Judge or, as the case may be, of such Magistrate.

(3) When any person is produced under sub-section (2) before the Special Judge,
he may, on the request of such person, after perusing the record, if any and
after giving the prosecution an opportunity of being heard, admit him to bail
on his executing a bond, with or without sureties, or refuse to admit him to
bail and direct his detention at such place as he deems fit:

Provided that nothing herein contained shall preclude the Special Judge from
canceling the bail of any such person at a subsequent stage if, for any reason,
he considers such cancellation necessary, but before passing such order he
shall afford such person an opportunity of being heard, unless for reasons to
be recorded he considered that the affording of such opportunity shall defeat
the purpose of this Act.

(4) When such person is produced under sub-section (2) before a Judicial
Magistrate, such Magistrate may, after authorising his detention in such
custody at such place and for such period as he considers necessary or proper
for facilitating his earliest production before the Special Judge, direct his
production before the Special Judge on a date and time to be fixed by him or
direct such person to be forthwith taken to, and produced before, the Special
Judge and he shall be so taken.

(5) Nothing in sub-section (3) or sub-section (4) shall preclude the Special
Judge or the Judicial Magistrate from remanding any such person to the custody
of the Sales Tax Officer holding inquiry against that person if such officer
makes a request in writing to that effect, and the Special Judge or the
Judicial Magistrate, after perusing the record, if any, and hearing such
person, is of the opinion that for the completion of inquiry or investigation
it is necessary to make such order:

Provided that in no case the period of such custody shall exceed fourteen days.

(6) When any person is arrested under this Act, the Sales Tax Officer shall
record the fact of arrest and other relevant particulars in the register
specified in sub-section (10) and shall immediately proceed to inquire into the
charge against such person and if he completes the inquiry within twenty-four
hours of his arrest, excluding the time necessary for journey as aforesaid, he
may, after producing such person before the Special Judge or the nearest
Judicial Magistrate, make a request for his further detention in his custody.

(7) While holding an inquiry under sub-section (6), the Sales Tax Officer shall
exercise the same powers as are exercisable by an officer in charge of a police
station under the Code of Criminal Procedure, 1898 (Act V of 1898), but such
officer shall exercise such powers subject to the foregoing provisions of this
section while holding an inquiry under this Act.

(8) If the Sales Tax Officer, after holding an inquiry as aforesaid, is of the
opinion that there is no sufficient evidence or reasonable ground for suspicion
against such person, he shall release him on his executing a bond, with or
without sureties, and shall direct such person to appear, as and when required,
before the Special Judge, and make a report to the Special Judge for the
discharge of such person and shall make a full report of the case to his
immediate superior.

(9) The Special Judge to whom a report has been made under sub-section (8) may,
after the perusal of record of the inquiry, and hearing the prosecution, agree
with such report and discharge the accused or, if he is of the opinion that
there is sufficient ground for proceedings against such person, proceed with
his trial and direct the prosecution to produce evidence.

(10) The Sales Tax Officer empowered to hold inquiry under this section shall
maintain a register to be called "Register of Arrests and Detentions"
in the prescribed form in which he shall enter the name and other particulars
of every person arrested under this Act, together with the time and date of
arrest, the details of the information received, the details of things, goods
or documents, recovered from his custody, the name of the witnesses and the
explanation, if any, given by him and the manner in which the inquiry has been
conducted from day to day; and, such register or authenticated copies of its
aforesaid entries shall be produced before the Special Judge, whenever such
Officer is so directed by him.

(11) After completing the inquiry, the Sales Tax Officer shall, as early as
possible, submit to Special Judge a complaint in the same form and manner in
which the officer in charge of a police station submits a report, before a
court.

(12) Any Magistrate of the first class may record any statement or confession
during inquiry under this Act, in accordance with the provisions of Section 164
of the Code of Criminal Procedure, 1898 (Act V of 1898).

(13) Without prejudice to the foregoing provisions to this section, the Federal
Government may, by notification in the official Gazette, authorise any other
officer working under the Central Board of Revenue to exercise the powers and
perform the functions of a Sales Tax Officer under this section, subject to
such conditions, if any, that it may deem fit to impose.]

37C. Prosecution and punishment
for evasion of tax, etc.-- (1) where-

(a) a person does not pay the amount of tax due in time and in the manner
specified for its payment and also fails to pay even after the expiry of a
period of sixty days of issuance of the notice for such payment by a Sales Tax
Officer, not below the rank of an Assistant Collector of Sales Tax, he shall be
liable to punishment for a term which may extend to three years, or with fine
which may extend to amount equal to the amount of tax involved, or with both;

(b) a person who is required to get himself registered under this Act fails to
get registered within sixty days of the commencement of taxable activity, he
shall be liable to punishment for a term which may extend to three years, or
with fine which may extend to amount equal to the amount of tax involved, or
with both;

(c) a person refuses to allow access to the premises, stocks, accounts or
records, etc. to the Sales Tax Officer or refuses or fails to present the same
as the case may be, when required under section 25 or 38 of this Act, he shall
be liable to punishment for a term which may extend to three years, or with
fine which may extend to amount equal to the loss of tax involved, or with
both;

(d) any officer of sales tax or any other person authorized to act under this
Act, acts or omits or attempts to act or omit in a manner causing loss to the
sales tax revenue or to other purposes of this Act, or abets or connives at any
such act or any attempt to practice any such act, he shall be liable to
punishment for a term which may extend to three years, or with fine which may
extend to amount equal to the amount of tax involved, or with both; or

(e) a registered person fails to file the return for two consecutive tax
periods without any lawful excuse or violates any embargo placed on removal of
goods in connection with recovery of tax, he shall be liable to punishment for
a term which may extend to one year, or with fine which may extend to any
amount equal to the amount of tax involved, or with both.

(2) In respect of offences under sub-section (1) the provisions of section 37A
and 37B so far as applicable shall apply.

38. Authorised
officers to have access to premises, stocks, accounts and records.-- (1) Any
officer authorised in this behalf by the Board or the Collector shall have free
access to business or manufacturing premises, registered office or any other
place where any stocks, business records or documents required under this Act
are kept or maintained belonging to any registered person or a person liable
for registration or whose business activities are covered under this Act or who
may be required for any inquiry or investigation in any tax fraud committed by
him or his agent or any other person; and such officer may, at any time,
inspect the goods, stocks, records, data, documents, correspondence, accounts
and statements, utility bills, bank statements, information regarding nature
and sources of funds or assets with which his business is financed, and any
other records or documents, including those which are required under any of the
Federal, Provincial or local laws maintained in any form or mode and may take
into his custody such records, statements, diskettes, documents or any part
thereof, in original or copies thereof in such form as the authorised officer
may deem fit against a signed receipt.

(2) The registered person, his agent or any other person specified in
sub-section (1) shall be bound to answer any question or furnish such
information or explanation as may be asked by the authorised officer.

(3) The department of' direct and indirect taxes or any other Government
department, local bodies, autonomous bodies, corporations or such other
institutions shall supply requisite information and render necessary assistance
to the authorised officer in the course of inquiry or investigation under this
section.]

38A. Power to
call for information.—

The Collector may, by notice in writing, require any
person, including a banking company, to furnish such

information or such statement in connection with any
investigation or inquiry in cases of tax fraud, as may be

specified in such notice.

40.
Searches under warrant-

(1) Where
any officer of sales tax has reason to believe that any documents or things
which in his opinion,

may be
useful for, or relevant to, any proceedings under this Act are kept in any
place, he may after

obtaining a warrant from the magistrate, enter that place and cause a search to
be made at any time.

(2) The
search made under sub-section (1) shall be carried out in accordance with the
relevant provisions of

the
Code of Criminal Procedure, 1898 (V of 1898).

40A. Search
without warrant.--

(1) Notwithstanding the provisions of Section 40, where any officer of Sales
Tax not below the rank of an Assistant Collector of Sales Tax has reasons to
believe that any documents or things which, in his opinion, may be useful for,
or relevant to, any proceeding under this act are concealed or kept in any place
and that there is a danger that they be removed before a search can be effected
under section 40, he may, after preparing a statement in writing of the grounds
of his belief for which search is to be made, search or cause search to be made
for such documents or things in that place.

(2) Any officer or person who makes a search or causes a search to be made
under sub-section (1) shall leave a signed copy of the statement referred to in
that section in or about the place searched and shall, at the time the search
is made or as soon as is practicable thereafter, deliver a signed copy of such
statement to the occupier of the place at his last known address.

(3) No suit, prosecution or other legal proceedings shall be instituted, except
with the previous sanction in writing of the Federal Government against any
person in respect of anything done or purporting to be done in respect of
exercise of any powers conferred by sub-section (1) or sub-section (2).

40B. Posting of
Sales Tax Officer.--Subject to such conditions and restrictions, as deemed fit
to impose, the Central Board of Revenue, may post Officer of Sales Tax to the
premises of registered person or class of such persons to monitor production,
sale of taxable goods and the stock position:

Provided that if a Collector, on the basis of material evidence, has reason to
believe that a registered person is involved in evasion of sales tax or tax
fraud, he may, by recording the reason in writing, post an Officer of Sales Tax
to the premises of such registered person to monitor production or sale of
taxable goods and the stocks position.

45. Power of
Adjudication. In cases involving assessment of tax, charging of additional tax,
imposition of penalty and recovery of amount erroneously refunded or any other
contravention under this Act or the rules made thereunder, the jurisdiction and
powers of adjudication of the Sales Tax Officers shall be as follows:-

(i)

Collector

Cases falling
under sub-section (2) of section 11 and section 36 of the Act without any
restriction as to the amount of tax involved or amount erroneously refunded.

(ii)

Additional
Collector

Cases falling
under sub-section (2) of section 11 and section 36 of the Act provided that
the amount of tax involved or the amount erroneously refunded does not exceed
ten million rupees.

(iii)

Deputy
Collector

(a) Cases
falling under sub-section (1) of section 11.

(b) Cases
falling under sub-section (2) of section 11 and section 36 of the Act
provided that the amount of tax involved or the amount erroneously refunded
does not exceed two and a half million rupees.

(iv)

An Officer of
Sales tax with any other designation

Such cases as may be notified by the Board.

Provided that the Board may, by notification in the official Gazette, vary the
jurisdiction and powers of any officer of Sales Tax or a class of officers of
Sales Tax.

Provided further that the Board shall have powers to regulate the system of
adjudication including transfer of cases and extension of time limit in
exceptional circumstances.

Explanation. –
For the purpose of this section, tax means the principal amount of sales tax
other than additional tax, and in case where only additional tax is involved,
the amount of additional tax.

45A. Power of
the Board, Collector and Collector (Adjudication) to call for records.-- (1)
The Board may, of its own motion, call for and examine the record of any
departmental proceedings under this Act or the rules made thereunder for the
purpose of satisfying itself as to the legality or propriety of any decision or
order passed therein by an Officer of Sales Tax, it may pass such order as it
may think fit:

Provided that no order imposing or enhancing any penalty or fine requiring
payment of a greater amount of sales tax than the originally levied shall be
passed unless the person affected by such order has been given an opportunity
of showing cause and of being heard.

(2) No proceeding under sub-section (1) shall be initiated in a case where an
appeal under Section 45B or Section 46 is pending.

(3) No order shall be made under this Section after the expiry of five years
from the date of original decision or order of the sub-ordinate officer
referred to in sub-section (1).

(4) The
Collector or Collector (Adjudication), may, in respect of any case decided by
an officer subordinate to him, exercise all or any of the powers of the Board
specified in sub-section (1).

45-B.Appeals.— (1) Any person, including the
Sales Tax Department, aggrieved by any decision or order passed under sections
10, 11, 36, 45 or 66, by an officer of Sales Tax below in rank to Additional
Collector may, within thirty days of the date of receipt of such decision or
order, prefer appeal to the Collector of Sales Tax (Appeals):

Provided that an appeal preferred after the expiry of thirty days may be
admitted by the Collector of Sales Tax (Appeals) if he is satisfied that the
appellant has sufficient cause for not preferring the appeal within the
specified period:

Provided further that the appeal shall be accompanied by a fee of one thousand
rupees to be paid in such manner as the Board may prescribe.

(2)The Collector of Sales Tax
(Appeals) may, after giving both parties to the appeal an opportunity of being
heard, pass such order as he thinks fit, confirming, varying, altering, setting
aside or annulling the decision or order appealed against.

(3)In deciding an appeal, the
Collector of Sales Tax (Appeals) may make such further inquiry as may be
necessary provided thathe shall not
remand the case for denovo consideration.

(4)Any person desirous of preferring
an appeal under sub-section (1) against any decision or order relating to any
tax demanded or any penalty imposed under this Act shall, before presenting the
appeal, deposit 15% of the principal amount of tax under such decision or
order:

Provided that, where in any case, the Collector of Sales Tax (Appeals) is
satisfied that the deposit of tax (Omitted) as aforesaid is likely to cause
undue hardship to the appellant, he may dispense with such deposit subject to
such conditions or restrictions he may deem fit to impose:

Provided further that in any particular case,
the Collector of Sales Tax (Appeals) may direct that pending decision of the
appeal, the tax (Omitted), shall be paid by the appellant in suitable
installments spreading over a period not exceeding six months from the date of
such direction:

Provided also that such interim order or orders, as the case may be, dispensing
with deposit of tax as herein-before prescribed shall cease to have effect on
the expiration of a total period of six months following the day on which the
first interim order is made, unless the case is finally decided, or the interim
order is withdrawn by the Collector of Sales Tax (Appeal) earlier.

(a)any decision or order passed
by a Collector or an Additional Collector of Sales Tax under sections 11, 36 or
45;

(b)any order passed by the
Collector of Sales Tax (Appeals) under section 45B; and

(c)any order passed by the
Board or the Collector of Sales Taxunder section 45A, may, within sixty days of the receipt of such
decision or order, prefer appeal to the Appellate Tribunal.

(2) The Appellate Tribunal may admit an appeal preferred after the period of
limitation specified in sub-section (1) if it is satisfied that there was
sufficient cause for not presenting it within the specified period.

(3) The appeal shall be accompanied by a fee of one thousand rupees paid in
such manner as the Board may prescribe.

(4) The Appellate Tribunal, after giving the parties to the appeal, an
opportunity of being heard may pass such orders in relation to the matter
before it as it thinks fit:

Provided that when any such order amounts to an interim order staying the
recovery of tax, such order shall cease to have effect on the expiration of a
period of six months following the day on which it is made unless the case is
finally decided, or the interim order is withdrawn by the Tribunal earlier:

Provided further that such interim order or orders, as the case may be, shall
cease to have effect on the expiration of a total period of six months
following the day on which the first interim order is made, unless the case is
finally decided, or the interim order is withdrawn by the Appellate Tribunal
earlier.

(5) The Appellate Tribunal shall send a copy of its order disposing the appeal
to the appellant and to the concerned Officer of Sales Tax.

(6) All appeals relating to the Sales Tax Act, 1951, pending before the Income
Tax Appellate Tribunal at the commencement of the Finance Act, 1997 shall stand
transferred for disposal to the Appellate Tribunal.

(7) Order under this section shall be passed within sixty days of filing of
appeal or within such extended period as the Tribunal may, for reasons to be
recorded in writing fix, provided that such extended period shall in no case
exceed ninety days.

(8) Subject to the provisions of this Act or any other law for the time being
in force, the Appellate Tribunal shall have power to regulate its own procedure
and the procedure of the Benches thereof in all matters arising out of the
exercise of its powers or of the discharge of its functions, including the
places at which the Benches shall hold their sittings.

(9)
The Chairman or any other member of the Appellate Tribunal authorized in this
behalf by the Chairman may, sitting singly, dispose of any case which has been
allotted to the bench of which he is member where —

(a) in any disputed case, other than a case where the
determination of any question having a relation to the rate of sales tax or to
the value of taxable goods for purposes of assessment is in issue or is one of
the points in issue, the difference in tax involved or the tax involved does
not exceed five hundred thousand rupees; or

(b) the amount of fine or penalty involved (***) does not
exceed five hundred thousand rupees.

47. Appeal to
the High Court.-- (1) An appeal shall lie to the High Court in respect of any
question of law arising out of an order under section 46.

(2) The appeal under this section shall be filed within sixty days of the date
upon which the aggrieved person or the Collector is served with notice of an
order under section 46.

(3) Where an appeal is filed under sub-section (1) by the aggrieved person, it
shall be accompanied by a fee of one thousand rupees.

(4) The appeal before the High Court shall be heard by a bench of not less than
two judges of the High Court.

(5) The High Court upon hearing the appeal shall decide the question of law
raised therein and shall deliver judgment thereon specifying the grounds on
which such judgment is based and shall send a copy of the judgment under the
seal of the Court to the Appellate Tribunal which shall pass such orders as are
necessary to dispose of the case in conformity with such judgment.

(6) Subject to sub-section (6A) and notwithstanding that an appeal has been
made to the High Court the tax shall be payable in accordance with the order
under section 46.

(6A) Where recovery of tax has been stayed by the
High Court by an order, such order shall cease to have effect on the expiration
of a period of six months following the day on which it is made unless the
appeal is decided, or such order is withdrawn, by the High Court earlier.

(7) Where the amount of tax is reduced as a result of the judgment in the
appeal, the amount of tax overpaid shall be refunded unless the High Court, on
application given by the Collector within thirty days of the receipt of the
judgment of the High Court that he intends to seek leave to appeal to the
Supreme Court, makes an order authorizing the Collector to postpone the refund
until the disposal of the appeal by the Supreme Court.

(8) The costs of the appeal shall be in discretion of the Court.

47A. Alternate
dispute resolution.—

(1)
Notwithstanding any other provision of this Act, or the rules made thereunder,
any registered person aggrieved in connection with any matter of sales tax in
respect of the following, namely:-

(a) the liability of tax against the registered person, or
admissibility of refunds, as the case may be;

(b) the extent of waiver of additional tax and penalty;

(c) the quantum of input tax admissible in terms of
sub-section (3) of section 7;

(d) relaxation of any procedural or technical irregularities
and condonation of any prescribed time

limitation; and

(e) any other specific relief required to resolve the
dispute,

may apply to the Central Board of Revenue for the appointment of a committee
for the resolution of any

hardship or dispute mentioned in detail in the application.

(2) The Central Board of Revenue may, after
examination of the application of a registered person, appoint a committee
consisting of an officer of sales tax and one or two persons from among the
notified panel of chartered or cost accountants, advocates, representatives of
trade bodies or associations, or any other reputable taxpayers for the
resolution of the dispute.

(3) The committee constituted under sub-section
(2) shall examine the issue and may, if it deems necessary, conduct inquiry,
seek expert opinion, direct any officer of sales tax or any other person to
conduct an audit and make recommendations in respect of the resolution of the
dispute as it may deem fit.

(4) The Board may, on the recommendation of the
committee, pass such order, as it may deem appropriate.

(5) The registered person may make the payment
of sales tax and other duty and taxes as determined by the Board in its order
under sub-section (4) and all decisions, orders and judgments made or passed
shall stand modified to that extent and all proceedings under this Act or the
rules made thereunder by any authority or forum shall abate:

Provided that, in case the matter is already subjudice before any forum or
tribunal or the court, an

agreement made between the registered person and the Board in the light of
recommendations of the

committee shall be submitted before that forum, tribunal or the court for consideration
and orders as

deemed
appropriate.

(6)
In case the registered person is not
satisfied with the orders of the Board, he may file an appeal with the
appropriate forum, tribunal or court under the relevant provisions of this Act
within a period of sixty days of the order passed by the Board under this
section has been communicated to the registered person.

(7)
The Board may, by notification in the
official Gazette, make rules for carrying out the purposes of this section.

48.
Recovery of arrears of tax.-

(1)
Where any amount of tax is due from any person, the officer of Sales Tax may:-

(a)
deduct the amount from any money owing to person from whom such amount is
recoverable and which may be at the disposal or in the control of such officer
or any officer of Income Tax, Customs or Central Excise Department;

(b)
require by a notice in writing any person who holds or may subsequently
hold any money for or on account of the person from whom tax may be recoverable
to pay to such officer the amount specified in the notice;

(c)
stop removal of any goods from the business premises of such person till such
time the amount of tax is paid or recovered in full;

(ca)
require by a notice in writing any person to stop clearance of imported goods
or manufactured goods or attach bank accounts;

(d)
seal the business premises till such time the amount of tax is paid or-
recovered in full;

(e)
attach and sell or sell without attachment any movable or immovable property of
the registered person from whom tax is due; and

(f)
may recover such amount by attachment and sale of any moveable or- immovable
property of the guarantor, person, company, bank or financial institution where
a guarantor or any other person, company, bank or financial institution fails
to make payment under such guarantee, bond or instrument.

(2)
For the purpose of recovery of tax, penalty or any other demand raised under
this Act, the officer of sales tax shall have the same powers which under the
Code of Civil Procedure 1908 (V of 1908), a Civil Court has for the purpose of
recovery of an amount due under a decree.

49. Sales of
taxable activity or transfer of ownership.-- (1) In case of termination of
taxable activity or part thereof or its sale or transfer of ownership to a
non-registered person, the possession of taxable goods or part thereof by the
registered person shall be deemed to be a taxable supply and the registered
person shall be required to account for and pay the tax on the taxable goods
held by him:

Provided that if the tax payable by such registered person remains unpaid, the
amount of unpaid tax shall be the first charge on the assets of the business
and shall be payable by the transferee of business

(2) In the case of sale or transfer of ownership of a taxable activity or part
thereof to another registered person as an ongoing concern, sales tax
chargeable on taxable goods or part thereof shall be accounted for and paid by
the registered person to whom such sale is made or ownership is transferred.

49A.Liquidators.-

(1)
Every person (hereinafter referred to as a “liquidator”) who is-

(a) a
liquidator of a company;

(b) a
receiver appointed by a Court or appointed out of Court;

(c) a trustee for a bankrupt; or

(d) a mortgagee in possession,

shall, within
fourteen days of being appointed or taking possession of an asset in Pakistan,
whichever occurs first, give written notice thereof to the Collector.

(2)
The Collector shall, within three
months of being notified under sub-section (1), notify the liquidator, in
writing, of the amount which appears to the Collector to be sufficient to
provide for any sales tax which is or will become payable by the person whose
assets are in the possession of the liquidator.

(3)
A liquidator shall not, without leave
of the Collector, part with any asset held as liquidator until the liquidator
has been notified under sub-section (2).

(4)
A liquidator-

(a) shall set aside, out of the proceeds of sale of any asset by
the liquidator, the amount notified by the

Collector under sub-section (2), or such amount as is subsequently
agreed to by the Collector; and

(b) shall be liable to the extent of
the amount set aside for the sales tax liability of the person who owned

the asset.

(5)
A liquidator shall be personally
liable to the extent of any amount required to be set-aside under sub-section
(4) for the tax referred to in sub-section (2) if, and to the extent that, the
liquidator fails to comply with the requirements of this section.

(6) Where the proceeds of
sale of any asset are less than the amount notified by the Collector under
sub-section (2), the application of sub-section (4) and (5) shall be limited to
the proceeds of sale.

(7)
This section shall have effect
notwithstanding anything contained in any other law for the time being in
force.

50. Power to
make rules.-- The Board may, by notification in the official Gazette, make
rules for carrying out the purposes of this Act including rules for charging
fee for processing return, claims and other documents and for preparation of
copies thereof.

51. Bar of
suits, prosecution and other legal proceedings.--

(1) No suit shall he brought in
any Civil Court
to set aside or modify any order passed, any assessment

made, any tax levied, any penalty imposed or collection of any tax made under
this Act.

(2) No suit, prosecution or
other legal proceeding shall lie against the Federal Government or
against

any public servant in respect of any order passed in good faith under this Act.

(3) Notwithstanding
anything in any other law for the time being in force, no investigation
or

inquiry shall be undertaken or initiated by any governmental agency
against any officer or official for

anything done in his official capacity under this Act, rules,
instructions or direction made or issued

thereunder without the prior approval of the Board.

51A. Assistance
to the officers of Sales Tax.—

All officers of Customs, Central Excise, Police and Civil Armed Forces and all
officers engaged in the collection of land revenue are hereby empowered and
required to assist officers of sales tax in the discharge of their functions
under this Act

52. Appearance
by authorised representative.-- A registered person required to appear before
the Appellate Tribunal or an officer of Sales Tax in connection with any
proceedings under this Act may, in writing, authorise any person1[having such
qualification as may be prescribed] to represent him or appear on his behalf.

53. Estate of deceased
person.-- The tax liability of a deceased registered person under the Act shall
be the first charge on his estate in the hands of his successors.

54. Estate in
bankruptcy.-- (1) If a registered person is declared bankrupt, the tax
liability under this Act shall pass on to the estate in bankruptcy if it
continues to operate the business.

(2) If
tax liability is incurred by an estate in bankruptcy, the tax is deemed to be a
current expenditure in the operations of the estate in bankruptcy and shall be
paid before the claims preferred by other creditors are settled.

55. Removal of
difficulties.-- If any difficulty arises in giving effect to the provisions of
this Act or the rules made or notifications issued thereunder, the Board may
through a general order or otherwise, issue instructions or directions, not
inconsistent with the provisions of this Act, for such actions to be taken by
an officer of sales tax or any other person as it considers necessary or
expedient for the purpose of removing the difficulty.

56. Service of
order, decisions, etc.-- Any adjudication order or decision made or any summons
or notice issued under this Act shall be served:

(a) by
tendering the adjudication order, decision, summons or notice or sending it by
registered post or courier service to the person for whom it is intended or to
his agent; and

(b) if the
adjudication order, decision, summons or notice cannot he served in any manner
provided in clause (a), by affixing it on the notice board of the local Sales
Tax Office.

57. Correction
of clerical errors, etc.-- Clerical or arithmetical errors in any assessment,
adjudication, order or decision may, at any time, be corrected by the officer
of Sales Tax who made the assessment or adjudication or passed such order or
decision or by his successor in office :

Provided that
before such correction, a notice shall be given to the registered person or to
a person affected by such correction.

58. Liability
for payment of tax in the case of private companies or business enterprises.--
Notwithstanding anything contained in the Companies ordinance 1984 (XLVII of
1984), where any private company or business enterprise is wound up and any tax
chargeable on the company or business enterprise, whether before, or in the
course, or after its liquidation, in respect of any tax period cannot be
recovered from the company or business enterprise, every person who was a owner
of, or partner in, or director of, the company or business enterprise during
the relevant period shall, Jointly and severally with such persons be liable
for the payment of such tax.

59.
Tax paid on stocks acquired before registration.--

The tax, (***), paid on goods purchased by a person who is subsequently
required to be registered under section 14 due to new liabilities or levies or
gets voluntary registration under this Act or the rules made thereunder, shall
be treated as input tax, provided that such goods were purchased by him from a
registered person against an invoice issued under section 23 during a period of
thirty days before making an application for registration and constitute his
verifiable unsold stock on the date of compulsory registration or on the date
of application for registration or for voluntary registration:

Provided that where a person imports goods, the tax paid by him thereon during
a period of ninety days before making an application for registration shall be
treated as an input tax subject to the condition that he holds the bill of
entry relating to such goods and also that these are verifiable unsold or
un-consumed stocks on the date of compulsory registration or on the date of
application for registration or for voluntary registration.

60. Powers to
deliver certain goods without payment of tax.-- Subject to such conditions,
limitations or restrictions as it thinks fit Federal Government may authorise
the import of goods or class of goods, without payment of the whole or any part
of the tax payable thereon to the following persons, namely:-

(i) registered importers importing such goods temporarily with a view to
subsequent exportation;

(ii) registered manufacturer-cum-exporters who import raw materials and
intermediary products for further manufacture of goods meant for export;

(iii) * * *

61. Repayment
of tax in certain cases.-- Subject to such conditions, limitations or
restrictions as it thinks fit to impose, the Board may authorise the repayment
in whole or in part of the tax paid on any goods of such class or description
as it may determine, which have been used in the production, manufacture,
processing, repair or refitting in Pakistan of goods of such class or
description as it may determine.

62. Drawback
allowable on re-export.-- When any goods which have been imported into Pakistan
and on which tax has been paid on importation are re-exported outside Pakistan
and such goods are capable of being identified, seven-eighth of such tax shall,
except as otherwise hereinafter provided, be repaid as drawback, and the
provisions of Customs Act, 1969 (IV of 1969), relating to drawback of customs
duties shall, so far as may apply to such tax, as they apply for the purposes
of that Act.

Provided that no such drawback shall be repaid unless the re-export is made
within a period of two years from the date of importation as shown in the
records of the Custom House.

Provided further that the Board may, on sufficient cause being shown, in any
case extend the said period by a further period of one year.

63. Drawback on
goods taken into use between importation and re-exportation. Notwithstanding
anything contained in section 62, the repayment of sales tax as drawback in
respect of goods which have been taken into use between importation and
re-exportation shall be subject to such orders, conditions or limitations as
may be passed or imposed by the Board in each case -

(a) modifying the amount of tax which shall be repaid as drawback on any such
goods or class of goods; or

(b) prohibiting the repayment of tax as drawback on any such goods or class of
goods; or

(c) varying the condition for the grant of drawback on any such goods or class
of such goods by restricting the period after importation within which the
goods must be re-exported.

64. Power to
declare what goods are identifiable and to prohibit drawback in case of
specified foreign territory.-- The Federal Government may, from time to time,
by notification in the official Gazette, prohibit the payment of drawback upon
the exportation of goods or any specified goods or class of goods to any
specified foreign port or territory.

65. Exemption
of tax not levied or short levied as a result of general practice.--
Notwithstanding anything contained in this Act, if in respect of any supply the
Federal Government is satisfied that inadvertently and as a general practice:-

(a) tax has not been charged in any area on any supply which was otherwise
taxable, or according to the said practice the amount charged was less than the
amount that should have actually been charged;

(b) the registered person did not recover any tax prior to the date it was
discovered that the supply was liable to tax; and

(c) the registered person started paying the tax from the date when it was
found that the supply was chargeable to tax;

It may, by a notification in the official Gazette, direct that the tax not
levied or short levied as a result of that inadvertent practice, shall not be
required to be paid for the period prior to the discovery of such inadvertent
practice.

66. Refund to
be claimed within one year.-- No refund of tax claimed to have been paid or
over paid through inadvertence, error or misconstruction or refund on account
of input adjustment not claimed within the relevant tax period, shall be
allowed, unless the claim is made within one year of the date of payment:

Provided that in a case where a registered person did not deduct input tax
within the relevant tax period, the Collector may, after satisfying himself
that input tax adjustment is due and admissible, allow the registered person to
take such adjustment in the tax period as specified by the Collector:

Provided further that in a case where the refund has become due on account of
any decision or judgement of any officer of sales tax or court or the Tribunal,
the period of one year shall be reckoned from the date of judgement or decision
of such officer, court or Tribunal.

67.
Delayed Refund.--

Where a refund due under section 10 is not made within the time specified in
section 10 from the date of filing of return, there shall be paid to the
claimant in addition to the amount of refund due to him, a further sum equal to
six per cent per annum of the amount of refund due, from the date following the
expiry of the time specified in section 10 from the date] to the day preceding
the day of payment of refund:

Provided that where there is reason to believe that a person has claimed the
refund which is not admissible to him, the provision regarding the payment of
such additional amount shall not apply till the investigation of the claim is
completed and the claim is either accepted or rejected.

68. Liability
of the registered person for the acts of his agent.-- When any person is expressly
or impliedly authorised by a registered person to be his agent for all or any
of the purposes of this Act, the registered person shall be responsible for the
act done by his agent.

69. Issuance of
certificate & duplicate of Sales Tax documents.-- A certificate or a
duplicate of any certificate, tax invoice, monthly return or other sales tax
documents may, on payment of a fee of ten rupees, be furnished to the
registered person applying for the same.

70. Computation
of limitation period.-- In computing the period of limitation prescribed for
any appeal or application under this Act, the day on which the order complained
of was served and, if the concerned person was not furnished with a copy of the
order, the time requisite for obtaining a copy of such order shall be excluded.

71. Special
procedure.—(1)] Notwithstanding anything contained in this Act, the Federal
Government may, by notification in the official Gazette, prescribe special
procedure for scope and payment of tax, registration, book keeping and
invoicing requirements and returns, etc. in respect of such supplies as may be
specified therein.

(2) * * *

(3) Notwithstanding anything contained in this Act or any other law for the
time being in force or any decision of any court the trade enrolment
Certificate Schemes immediately in force before the commencement of the Finance
Act, 1999, shall be deemed to be validly made under this Act.

72. Officers of
sales tax to follow Board's orders, etc.-- All officers of sales tax and other
persons employed in the execution of this Act shall observe and follow the
orders, instructions and directions of the Board:

Provided that no such orders, instructions or directions shall be given so as
to interfere with the discretion of officers of sales tax in the exercise of
their quasi-judicial functions.

73. Certain
transactions not admissible.—

(1)
Notwithstanding anything contained in this Act or any other law for the time
being in force, payment of the amount for a transaction exceeding value of
fifty thousand rupees, excluding payment against a utility bill, shall be made
by a crossed cheque drawn on a bank or by crossed bank draft or crossed pay
order or any other crossed banking instrument showing transfer of the amount of
the sales tax invoice in favour of the supplier from the business bank account
of the buyer.

(2)
The buyer shall not be entitled to claim input tax credit, adjustment or
deduction, or refund, repayment or draw-back or zero-rating of tax under this
Act if payment for the amount is made otherwise than in the manner prescribed
in sub-section (1), provided that payment in case of a transaction on credit is
so transferred within one hundred and eighty days of issuance of the tax
invoice.

(3)
The amount transferred in terms of
this section shall be deposited in the business bank account of the supplier,
otherwise the supplier shall not be entitled to claim input tax credit,
adjustment or deduction, or refund, repayment or draw-back or zero-rating of
tax under this Act.

Explanation— For the purpose of this section, the term
“business bank account” shall mean a bank account utilized by the registered
person for business transactions, declared to the Collector in whose
jurisdiction he is registered.

74.Condonation of time-limit.—

Where any time or period has been specified under any of the provisions of the
Act or rules made thereunder within which any application is to be made or any
act or thing is to be done, the Central Board of Revenue may, in any case or
class of cases, permit such application to be made or such act or thing to be
done within such time or period as it may consider appropriate:

Provided that the Board may,
by notification in the official Gazette, and subject to such limitations or
conditions as may be specified therein, empower any Collector to exercise the
powers under this section in any case or class of cases.

75.
Application of the provisions of Act IV of 1969 to Sales Tax.— The Federal
Government may, by notification in the official Gazette, declare that any of
the provision of the Customs Act, 1969 (IV of 1969), relating to the levy of,
and exemption from, customs duties, draw-back of duty, warehousing,
confiscation, and procedure relating to offences and appeals shall, with such
modifications and alterations as it may consider necessary or desirable to
adapt them to the circumstances, be applicable in regard to like matters in
respect of the tax imposed by section 3

THE THIRD
SCHEDULE

See clause (a)
of sub-section (2) of section 3

Serial No.

Description

Heading Nos.
of the First Schedule to the Customs Act, 1969 (IV of 1969)

(1)

(2)

(3)

1

Fruit juices
and vegetable juices

20.09

2

Ice Cream.

21.05

3

Aerated
waters or beverages.

22.01 and
20.02

4

Syrups and
squashes.

Respective
headings

5

Cigarettes.

2402.2000

6

Substances
registered as drugs under the Drugs Act, 1976 (XXXI of 1976) and medicaments
as are classifiable under any heading of Chapter 30 of the First Schedule to
the Customs Act, 1969 (IV of 1969) excluding supplies made to government
hospitals on or after the 21st day of March, 2002.

Chapter 30

THE FIFTH
SCHEDULE See section 4

Serial No.

Description

(1)

(2)

1.

(i) Supply,
repair or maintenance of any ship which is neither;

(a) a ship of
gross tonnage of less than 15 LDT; nor

(b) a ship
designed or adapted for use for recreation or pleasure.

(ii) Supply,
repair or maintenance of any aircraft which is neither;

(a) an
aircraft of weight-less than 8000 kilograms; nor

(b) an aircraft
designed or adapted for use for recreation or pleasure.

(iii) Supply
of spare parts and equipment for ships and aircraft falling under (i) and
(ii) above.

(iv) Supply
of equipment and machinery for pilot age, salvage or towage services.

(v)
Supply of equipment and machinery for air navigation services.

(vi)
Supply of equipment and machinery for other services provided for the
handling of ships or aircraft in a port or CustomsAirport.

2.

Supply to
diplomats, diplomatic missions, privileged persons and privileged
organizations which are covered under various Acts, Orders, Rules,
Regulations and Agreements passed by the Parliament or issued or agreed by
the Government of Pakistan.

3.

Supplies to
duty free shops, provided that in case of clearance from duty free shops
against various baggage rules issued under the Customs Act, 1969, (IV of
1969), the supplies from duty free shops shall be treated as import for the
purpose of levy of sales tax.

4.

Supplies
against international tenders.

5.

Supplies of
raw materials, components and goods for further manufacture of goods in the
Export Processing Zone.

6.

Supplies of
such locally manufactured plant and machinery to the Export Processing Zones
and to petroleum and gas sector Exploration and Production companies, their
contractors and sub-contractors as may be specified by the Federal
Government, by notification in the official Gazette, subject to such
conditions and restrictions as may be specified in such notification.

7.

Supplies made
to exporters under the Duty and Tax Remission Rules, 2001 subject to the
observance of procedures, restrictions and conditions prescribed therein.

8.

Imports or
supplies made to Gawadar Special Economic Zone, excluding vehicles falling
under heading 87.02 of the Pakistan Customs Tariff, subject to such
conditions, limitations and restrictions as the Central Board of Revenue may
impose.

THE SIXTH
SCHEDULE

See
section 3(1)

Serial
No.

Description

Heading Nos.
of the First Schedule to the Customs Act, 1969

(IV of 1969)

(1)

(2)

(3)

1.

Live animals.

Respective
headings of Chapter 1.

2.

Agricultural
produce of Pakistan,
not subjected to any further process of manufacture.

(iii)
all eggs, poultry and meats of bovine animals, fish and crustaceans, whether
or not fresh, frozen or otherwise preserved;

(iv)
Fresh, liquid and dried milk, without addition of sugar or any other
sweetening matter whether packed or not; milk preparations obtained by
replacing one or more of the constituents of milk by another substance,
whether or not packed for retail sale, falling under heading No. 19.01 of the
First Schedule to the Customs Act, 1969 (IV of 1969) plain yogurt excluding
packaged or sold under trade mark or brand name

(v)
cream, whey and cheese, excluding those packaged and sold under brand names
or trade marks;

(xi)
milk based food preparations of heading 19.01 of the First Schedule to the
Customs Act, 1969, (IV of 1969)

Respective
headings.

(xii)
poultry and meat of bovine animals, fish and crustaceans whether or not
fresh, frozen or otherwise preserved and sold in retail packings or otherwise
with or without brand names and trade marks.

Respective
headings of Chapter 2 and 3;

3A

Eggs for
hatching (parent stock), including consignments of such eggs imported either
against bank guarantee or otherwise but without payment of sales tax since
the 1st July, 1998.

0407.0010

4.

The following
agricultural produce on their import into Pakistan:-

Bulbs,
tubers, etc.,

06.01

Oil palm
seedling

0602.2090

Potatoes.

0701.1000 and
0701.9000

Onions and
shallots.

0703.1000

Garlic.

0703.2000

Dried
leguminous vegetables, shelled, whether or not skinned or split.

07.13

Live plants
and seeds of vegetables, fruits and flowers.

Respective
headings.

Wheat

10.01

Oats.

10.04

Corn seeds.

1005.1000

Grain sorghum
seeds.

1007.0000

Millet seeds.

1008.2000

Seeds, fruits
and spores for sowing.

12.09

Cinchona
bark.

1211.9090

Sugar beet.

1212.9100

Sugar Cane.

1212.9900

5.

Supply of
Cotton seed which is :-

1207.2000

a)
(***)

b)
exclusively meant for sowing purposes, subject to such conditions as the
Board may specify.

6.

Desi Ghee
derived from milk; butter not sold under brand name or trade mark and supply
of locally produced crude vegetable oil obtained from the locally produced
seeds other than cotton seed, except cooking oil, without having undergone
any process except the process of washing.

Respective
headings

6A.

Edible oils
and vegetable ghee, including cooking oil, on which Central Excise Duty is
charged, levied and collected as if it were a tax payable under section 3 of
this Act.

Respective
headings

7

Omitted

8

Omitted

9 & 10

Omitted

11.

Contraceptives
and accessories thereof

Respective
headings

12.

Omitted

13.

Omitted

14.

Omitted

15.

Omitted

16.

Omitted

17.

Omitted

18.

Omitted

19.

Omitted

20.

"Holy
Quran", complete or in parts, with or without translation; audio and
video cassettes recorded with Quranic verses; other holy books.

49.01
and 85.24

21.

Newspapers,
books, journals and periodicals excluding directories of all sorts.

49.01,49.02
and 49.03

22.

Currency
notes, bank notes, shares, stocks and bonds.

49.07

23.

Poultry feed
and its ingredients.

Respective
headings.

24.

Silver and
gold, in un-worked condition; monetary gold.

71.06 and
71.08

25.

Goods
produced or manufactured in and exported from Pakistan
which are subsequently imported in Pakistan within one year of their
exportation, provided conditions of section 22 of the Customs Act, 1969, are
complied with.

Respective
headings.

26.

Goods
(including dry fruits imported from Afghanistan) temporarily imported into
Pakistan, meant for subsequent exportation charged to zero-rate of customs
duty subject to the similar restrictions, limitations, conditions and
procedures as are envisaged for the purpose of applying zero-rate of customs
duty on such goods under the Customs Act, 1969 (IV of 1969).

99.19, 99.20
and 99.21

27.

Re-importation
of foreign origin goods which were temporarily exported out of Pakistan
subject to similar conditions as are envisaged for the purposes of applying
zero-rate of customs duty under the Customs Act, 1969.

99.18

28.

Import of
replacement goods supplied free of cost in lieu of defective goods imported,
subject to similar conditions as are envisaged for the purposes of applying
zero-rate of customs duty under the Customs Act, 1969.

99.16

29.

Defence
stores (other than those as are manufactured in Pakistan) imported by Federal
Government against foreign exchange allocation for defence; defence stores
supplied by manufacturers under Defence Production Division, trucks and
vehicles falling under PCT heading 87.04 of the First Schedule to the Customs
Act, 1969 (IV of 1969) specially modified for mounting defence equipments,
their parts and accessories assembled or manufactured by local manufacturers
for supply to Armed Forces.

Respective
headings.

30.

Articles
imported through post as unsolicited gifts, subject to the same conditions as
are envisaged for the purposes of applying zero-rate of customs duty under
the Customs Act, 1969.

99.09

31.

Imported
samples, subject to the same conditions as are envisaged for the purposes of
applying zero-rate of customs duty under the Customs Act, 1969.

99.10

32.

Educational,
scientific and cultural material imported from a country signatory to UNESCO
Agreement or a country signatory to bilateral commodity exchange agreement
with Pakistan,
subject to the same conditions as are envisaged for the purposes of exemption
under the Customs Act, 1969.

Respective headings.

33.

Personal
wearing apparel and bonafide baggage imported by overseas Pakistanis and
tourists, if imported under various baggage rules and is exempt from Customs
duties.

Respective
headings.

34.

Ship which is
neither;

(a)
a ship of gross tonnage of less than 15 LDT; nor

(b)
a ship designed or adapted for use for recreation or pleasure.

Respective
headings.

35.

Aircraft
which is neither;

(a)
an aircraft of unladen weight of less than 8000 kilograms;
nor

(b)
an aircraft designed or adapted for use for recreation or pleasure.

Respective
headings.

36.

Spare parts
and equipment for ships and aircraft covered by serial number 34 and 35
above.

Respective
headings.

36 A

Import of
ship stores, subject to the procedures, conditions and restrictions as may be
specified by the Collector of Customs in this behalf including those
consignments of such stores that have been released without charging sales
tax since the 1st July, 1998 but excluding such consignments of ship stores as
have been cleared on payment of sales tax.

Respective
headings.

37.

Equipment and
machinery for pilotage, salvage or towage for use in ports or airports.

Respective
headings.

38.

Equipment and
machinery for air navigation.

Respective
headings.

39.

Equipment and
machinery used for services provided for handling of ships or aircrafts in a
customs port or Customs airport.

Respective
headings.

40.

Goods
imported by diplomats, diplomatic missions, privileged persons and privileged
organizations which are covered under various Acts and, orders, rules,
regulations made thereunder and agreements by the Federal Government provided
that such goods are charged to zero-rate of customs duty under the Customs
Act, 1969 and the conditions laid down for customs purposes are observed.

99.01, 99.02,
99.03, and 99.06

40 A

Import of
articles of household and personal effects including vehicles and also the
goods for donation to projects established in Pakistan imported by any of the
rulers of Gulf Shaikhdoms who is in possession of residential accommodation
in Pakistan and goods including vehicles by the United Arab Emirate
dignitaries as are listed in column (2) against heading No. 99.05 of the
First Schedule to the Customs Act, 1969 (IV of 1969) for their personal use
and for donation to welfare projects established in Pakistan subject to the
similar conditions as are envisaged for the purposes of applying zero-rate of
customs duty on such goods under the said Act.

99.05

41.

Goods
imported or supplied under grants-in-aid for which a specific consent has
been obtained from the Central Board of Revenue; supplies and imports under
agreements signed by the Government of Pakistan before the 30th June, 1996,
provided the agreements contained the provision for exemption of tax at the
time of signing of agreement.

Respective
headings.

42.

Supplies made
by.-

(a)
manufacturers whose annual turnover from taxable supplies made in any tax
period during the last twelve months ending any tax period does not exceed
rupees five million; and

(b)
retailers whose annual turnover from supplies, whether taxable or otherwise,
made in any tax period during the last twelve months ending any tax period
does not exceed rupees five million.

Respective
headings.

43.

Raw material
and intermediary goods manufactured or produced, and services provided or
rendered, by a registered person, consumed by himself in the manufacture of
goods subject to sales tax.

Respective
headings.

44.

Such plant
and machinery as is notified by the Federal Government in the official
Gazette but if imported, these shall be entitled to exemption from sales tax
on importation if these are not manufactured in Pakistan.

Respective
headings.

45.

Computer
hardware including lap tops, notebooks, PCs, main frame and their peripheral
units and parts thereof.

Respective
headings.

46.

Import of all
such gifts as are received, and such equipment for fighting tuberculosis,
leprosy, AIDS and cancer and such equipment and apparatus for the
rehabilitation of the deaf, the blind, crippled or mentally retarded as are
purchased or otherwise secured, by a charitable non-profit making institution
solely for the purpose of advancing declared objectives of such institution,
subject to the similar conditions as are envisaged for the purposes of
applying zero-rate of customs duty under the Customs Act, 1969 (IV of 1969).

99.12, 99.13
and 99.14

46 A

Goods
imported by or donated to hospitals run by the Federal Government or a
Provincial Government; and non-profit making educational and research
institutions subject to the similar restrictions, limitations, conditions and
procedures as are envisaged for the purpose of applying zero-rate of customs
duty on such goods under the Customs Act, 1969 (IV of 1969):

99.12, 99.14
and 99.15

47.

Import of all
goods received, in the event of a natural disaster or other catastrophe, as
gifts and relief consignments, including goods imported for the President’s
Fund for Afghan Refugees, relief goods donated for Afghan Refugees, gifts for
President’s Fund for Assistance of Palestine and gifts received by Pakistani
organizations from Church World Services or the Catholic Relief Services
subject to the similar conditions as are envisaged for the purposes of
applying zero-rate of customs duty under the Custom Act.

99.07, 99.08,
99.09 and 99.11

48.

Computer
software.

Respective
headings.

49.

Tractors,
bulldozers and combined harvesters; and CKD kits thereof imported by
recognized local manufacturers as per their approved deletion programme
subject to the same conditions as are envisaged for the purposes of exemption
under the Customs Act.

Respective
headings

50.

Supply of
other such agricultural implements as may be specified in a notification to
be issued by the Federal Government in the official Gazette.

Respective
headings.

51.

Omitted

52.

Omitted

53.

Omitted

Omitted

54.

Omitted

55.

Omitted

56.

Bricks and
cement blocks

6810.1100 and
6901.0000

57.

Omitted

58.

Omitted

Omitted

59.

Artificial
kidneys, eye cornea, hemodialysis machines, hemodialyzers, A.V. fistula
needles, hemodialysis fluids and powder, blood tubing tines for dialysis and
reverse osmosis plants for dialysis, double lumen catheter for dialysis,
catheter for renal failure patient and peritoneal dialysis solution and
angioplasty equipment (balloons, catheters, wires and stents), subject
to the similar conditions and procedures as are envisaged for the purpose of
applying zero-rate of customs duty on these goods under the Customs Act, 1969
(IV of 1969).

99.24 and
99.25

60.

Supply of
fixed assets against which input tax adjustment is not available under a
notification issued in terms of clause (b) of sub-section (1) of section
8 of the Sales Tax Act, 1990.

Respective
headings.

Interpretation.---
For the purpose of exemption of sales tax under serial Nos. 11, 26, 27, 28, 30,
31, 40, 40A, 46, 46A, 47 and 59 of this Schedule, the definitions,
restrictions, limitations, conditions and procedures and all the provisions of
Chapter 99 of the First Schedule to Customs Act, 1969 (IV of 1969), for the
purpose of applying zero-rate of customs-duty, shall, mutatis mutandis apply
and shall be deemed and construed to be part of this Schedule.